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What to look for in Procter & Gamble’s earnings

Procter & Gamble Co. is scheduled to release fiscal first-quarter earnings before the bell on Friday.

Analysts are concerned that the company’s cost-cutting moves are being offset by inefficiencies in manufacturing in some of its overseas markets and a brand portfolio that has become too complex.

P&G PG, -1.19% said in August it was selling its global pet-care business, including the Iams and Eukanuba brands, to focus on its core businesses. The maker of Tide detergent, Pampers diapers and Olay facial-care products said it would sell or exit up to 100 underperforming brands to simplify its business and concentrate on 70 to 80 core labels, which it said represent about 90% of its sales and over 95% of its profit.

Here are some other things investors can expect:

Earnings: P&G is expected to report per-share earnings of $1.07 a share, up from $1.05 a share a year earlier, according to analysts surveyed by FactSet. P&G said in August it expected its full-year per-share earnings to rise in a mid-single-digit range, including a 20-cents negative impact from restructuring charges.

Revenue: Analysts surveyed by FactSet are expecting revenue to fall to $20.8 billion from $21.2 billion. For the year, the company is expecting growth in the low-single digit range, including a negative impact from currency fluctuations

Stock Reaction: Shares of P&G, a Dow industrials component, have gained 1.3% in the year through Thursday afternoon. The Dow has gained just 0.7% in the same period.

Key points: J.P. Morgan analyst John Faucher said a consistent expansion of margins would boost P&G’s shares. However, he is expecting first-quarter margins to narrow for a sixth quarter, and said the weakness that comes about two and a half years into a cost-cutting program is hurting investor confidence. The analyst said the company’s move to increase local manufacturing, among other factors, could help. “Improving margins in the international markets is an enormous opportunity for Procter,” he said, adding that while the U.S. represents 35% of P&G’s sales, it represents about 60% of its adjusted pre-tax profit.

Other areas of investor focus include P&G’s advertising spending, and how it is allocating budget between traditional and digital media, as well as how demand is holding up in emerging markets versus the U.S. and other developed markets.